Malaysia is increasingly relying on natural gas to meet rising electricity demand caused by extreme temperatures and the rapid expansion of data centres, according to recent energy data and industry analysts.
Power consumption in Peninsular Malaysia, which represents the majority of the country’s electricity usage, recorded a sharp increase in April. Data from the Grid System Operator showed electricity demand rose by 11.5 per cent compared to the same period last year.
To support the higher demand, gas-powered electricity generation surged significantly during the month, reaching its highest level in years.
Gas-fired plants produced 5.54 terawatt-hours of electricity in April, while output from coal plants declined notably.
The trend continued through most of May, with gas-generated electricity posting strong growth as coal usage remained lower.
State energy giant said higher electricity generation from gas plants had increased domestic gas requirements. To meet demand, the company ramped up deliveries of liquefied natural gas from offshore fields to Peninsular Malaysia.
Shipping data from energy analytics firm Kpler showed Malaysia transported 446,000 tonnes of LNG domestically this year, almost triple the total volume moved in all of 2025.
Malaysia’s growing dependence on gas contrasts with developments in several Asian countries where coal usage has increased amid concerns over tighter LNG supplies linked to tensions in the Middle East.
Analysts say Malaysia’s relatively low domestic gas prices have helped attract major investments in data centres, which are expected to become a major driver of future electricity demand growth.
Energy consultancy Energy Aspects projected that national power demand could continue expanding by about four per cent annually over the next few years due largely to the construction of new data centre facilities.
The country’s Energy Commission has also warned that warmer weather conditions are likely to sustain higher electricity consumption in the coming months.
Despite stronger domestic demand, Malaysia has continued to boost LNG exports this year. Kpler data indicated LNG exports rose by 14.6 per cent year-on-year to 12.81 million tonnes during the period under review.
Industry analysts believe the global LNG market could shift into oversupply after 2028, potentially allowing Malaysia to maintain export commitments while purchasing cheaper spot cargoes to support local consumption.
